SDLT and multiple dwellings relief

Tax practitioners involved with stamp duty land tax will probably have encountered letters that are sent to homeowners purporting to recover a tax refund on the basis of multiple dwellings relief (MDR); a phenomenon probably attributable to the media coverage of ‘granny annexes’ during the passage of FA 2016 (discussed below). A corollary of this in my experience is the rise in claims for professional negligence against conveyancing solicitors for failing to advise on or failure to submit a return for MDR.

 

Legislation

In a transaction involving at least two dwellings FA 2003 Sch 6B permits SDLT to be calculated by reference to the average chargeable consideration rather than the aggregate. In other words the total chargeable consideration attributable to the dwellings can be divided by the number of dwellings and the SDLT rates applied to the result. That tax charge is then...

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